I recently read a report that said:
“Several of my clients are in the credit restoration business and a recent conference call with some of the heavy hitters in the business revealed an astonishing new update to how the FICO score is computed.
Balance management – that is the practice of getting the “balance to available credit” (similar to ltv) below 50% and ultimately to below 30% for maximum benefit, “NO LONGER appears to improve the score” was the quote on the conference call. It was a common, and very simple way to get a few point increase in FICO score was to transfer balances accross cards, or pay down across cards to get the balances below 50 and 30% of the available credit line. Another common practice if there was no room on other cards or no cash to pay balances down was to call the credit companies and request an increase in the available credit limit – which would result in an improved ratio and a better score. It appears this is NO LONGER the case.”
In review of our recent files… we do not feel this is accurate information. Our files show that folks who pay their accounts down to at lest a 50% level do have an improvement in their scores.
Don’t be fooled by those who don’t have many clients, are not working full time in the business, and just plain don’t know… Steve Thorne at Mortgage Banker in Cary 919 649 5058 if you want to buy a house and need more information!
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